Depositors at the failed Central Investment and Finance Ltd (CIFL) are still wary of investors being brought in, even with Central Bank (CB) sanction, because they have been let down many times in the past. These were the sentiments that emerged at the 4th Annual General meeting of the CIFL Depositors Association (CIFLDA) at the [...]

Business Times

Failed CIFL: New investor proposed but depositors wary

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Depositors at the failed Central Investment and Finance Ltd (CIFL) are still wary of investors being brought in, even with Central Bank (CB) sanction, because they have been let down many times in the past.

Ms. Hema Jayasinghe

These were the sentiments that emerged at the 4th Annual General meeting of the CIFL Depositors Association (CIFLDA) at the Colombo Public Library hall on Saturday, August 19, which also discussed a proposal received from the CB in which a Swiss company has expressed interest in investing and taking over the collapsed finance company.

While the depositors unanimously approved a resolution backing the proposal, some depositors – who reluctantly approved the plan – also expressed their reservations over whether they could trust and have faith in such initiatives by the CB and the Government given the experience in the past.

While the Swiss company has proposed to initially invest Rs.1.1 billion, its repayment plan presented by association president, W. Gunawardena to depositors was also spelled out at the meeting in which the Business Times was present. The plan provides for 15 per cent of a deposit to be paid within three months after the new company is established. By March 21, 2018 another 10 per cent is to be paid and within April 1, 2018 and March 31,2019 another 10 per cent will be paid.

Further, between April 1 and September 30, 2019 another 15 per cent will be paid which then totals 50 per cent of the total deposit.
The investor is offering 8 per cent interest for the balance 50 per cent and expects to pay off the entire deposit within by 3 ½ to four years’ time from the time the company is floated. The CB had requested association officials to discuss the proposal with members and report back on the response.

Several depositors spoke to the Business Times on the sidelines of the AGM.

Some were confident of the plan while others expressed their serious concern over the delay by the Government and the CB in resolving their issues, saying “people are dying unable to meet their medical expenses and some are also committing suicide unable to meet their essential expenses.”

Some of these concerned depositors are widows who said they are facing a major problem of giving their daughters in marriage due to the lack of cash to offer as dowry.

Members of the association

Among them, Ms. Hema Jayasinghe, Seeduwa a widow with three children, said(tearfully) that they are clueless as to what is happening to their money and those who promised good governance have betrayed them leaving them with the only option of suicide as they are extremely handicapped in proceeding in life as their total savings are tied up.

Rohith Delikhan, representative from Swiss investor Chancental Works GmbH, was present at the AGM and in explaining the proposal, said that the investor was willing to take over CIFL with an investment of Rs 1.1 billion.

Dr. Delikhah, who has Sri Lankan roots, has been attached to the Swiss-based company (www.chancental.com) as an advisor since January 2016 according to his Linkedin profile and also founded the hospitality training institute in Colombo, the Swiss Institute for Service Industry Development.

Mr. Gunawardena said that they were not given the business plan but it was given to the Central Bank by Chancental which is an advisory and investment company providing strategy, branding, marketing and business re-engineering, aviation, tourism among other activities, operating in Germany, Switzerland, Austria, USA, China, Hong Kong, Myanmar, Singapore and Sri Lanka.

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